FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Bunge's various financial instruments include certain components of working capital such as Trade accounts receivable and Trade accounts payable. Additionally, Bunge uses short- and long-term debt to fund operating requirements. Trade accounts receivable, Trade accounts payable, and Short-term debt are generally stated at their carrying value, which is a reasonable estimate of fair value. See Note 3 - Trade Structured Finance Program for trade structured finance program, Note 7 - Other Non-Current Assets for long-term receivables from farmers in Brazil, net and other long-term investments, and Note 13 - Debt for short- and long-term debt. Bunge's financial instruments also include derivative instruments and marketable securities, which are stated at fair value. The fair value standard describes three levels within its hierarchy that may be used to measure fair value. Level Description Financial Instrument (Assets / Liabilities) Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities. Exchange traded derivative contracts. Marketable securities in active markets. Level 2 Observable inputs, including adjusted Level 1 quotes, quoted prices for similar assets or liabilities, quoted prices in markets that are less active than traded exchanges and other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Exchange traded derivative contracts (less liquid markets). Level 3 Unobservable inputs that are supported by little or no market activity and that are a significant component of the fair value of the assets or liabilities. Assets and liabilities whose value is determined using proprietary pricing models, discounted cash flow methodologies or similar techniques. In many cases, a valuation technique used to measure fair value includes inputs from multiple levels of the fair value hierarchy. The lowest level of input that is a significant component of the fair value measurement determines the placement of the entire fair value measurement in the hierarchy. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the classification of fair value assets and liabilities within the fair value hierarchy levels. For a further definition of fair value and the associated fair value levels, refer to Note 15 - Fair Value Measurements, included in the Company's 2023 Annual Report on Form 10-K. The following table sets forth, by level, the Company’s assets and liabilities that were accounted for at fair value on a recurring basis. Fair Value Measurements at Reporting Date September 30, 2024 December 31, 2023 (US$ in millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Cash equivalents $ 150 $ 20 $ — $ 170 $ 315 $ 149 $ — $ 464 Readily marketable inventories (Note 5) — 5,067 1,128 6,195 — 5,175 662 5,837 Trade accounts receivable (1) — 1 — 1 — 1 — 1 Unrealized gain on derivative contracts (2) : Interest rate — 13 — 13 — 12 — 12 Foreign exchange — 348 — 348 — 253 — 253 Commodities 60 449 74 583 198 737 88 1,023 Freight 45 — — 45 80 — — 80 Energy 35 — — 35 114 — — 114 Credit — 2 — 2 — — — — Other (3) 82 33 — 115 40 39 — 79 Total assets $ 372 $ 5,933 $ 1,202 $ 7,507 $ 747 $ 6,366 $ 750 $ 7,863 Liabilities: Trade accounts payable (1) $ — $ 394 $ 175 $ 569 $ — $ 591 $ 232 $ 823 Unrealized loss on derivative contracts (4) : Interest rate — 174 — 174 1 273 — 274 Foreign exchange — 276 — 276 — 223 — 223 Commodities 67 551 57 675 166 417 17 600 Freight 74 — — 74 68 — — 68 Energy 45 1 — 46 132 1 — 133 Credit — 2 — 2 — — — — Total liabilities $ 186 $ 1,398 $ 232 $ 1,816 $ 367 $ 1,505 $ 249 $ 2,121 (1) These receivables and payables are hybrid financial instruments for which Bunge has elected the fair value option as they are derived from purchases and sales of agricultural commodity products in the normal course of business. (2) Unrealized gains on derivative contracts are generally included in Other current assets. There were $1 million included in Other non-current assets at September 30, 2024, and December 31, 2023, respectively. (3) Other includes the fair values of marketable securities and investments in Other current assets and Other non-current assets. (4) Unrealized losses on derivative contracts are generally included in Other current liabilities. There were $147 million and $260 million included in Other non-current liabilities at September 30, 2024, and December 31, 2023, respectively. Cash equivalents —Cash equivalents primarily includes money market funds and commercial paper investments. Bunge analyzes how the prices are derived and determines whether the prices are liquid or less liquid tradable prices. Cash equivalents with liquid prices are valued using prices from publicly available sources and classified as Level 1. Cash equivalents with less liquid prices are valued using third-party quotes or pricing models and classified as Level 2. Readily marketable inventories —RMI reported at fair value are valued based on commodity futures exchange quotations, broker or dealer quotations, or market transactions in either listed or OTC markets with appropriate adjustments for differences in local markets where the Company's inventories are located. In such cases, the inventory is classified within Level 2. Certain inventories may utilize significant unobservable data related to local market adjustments to determine fair value. In such cases, the inventory is classified as Level 3. If the Company used different methods or factors to determine fair values, amounts reported as unrealized gains and losses on derivative contracts and RMI at fair value in the condensed consolidated balance sheets and condensed consolidated statements of income could differ. Additionally, if market conditions change subsequent to the reporting date, amounts reported in future periods as unrealized gains and losses on derivative contracts and RMI at fair value in the condensed consolidated balance sheets and condensed consolidated statements of income could differ. Derivatives —The majority of exchange traded futures and options contracts and exchange cleared contracts are valued based on unadjusted quoted prices in active markets and are classified within Level 1. The majority of the Company’s exchange traded agricultural commodity futures are cash-settled on a daily basis and, therefore, are not included in these tables. The Company's forward commodity purchase and sales contracts are classified as derivatives along with other OTC derivative instruments, primarily relating to freight, energy, foreign exchange and interest rates, and are classified within Level 2 or Level 3 as described below. The Company estimates fair values based on exchange quoted prices, adjusted as appropriate for differences in local markets. These differences are generally valued using inputs from broker or dealer quotations, or market transactions in either the listed or OTC markets. In such cases, these derivative contracts are classified within Level 2. OTC derivative contracts include swaps, options, and structured transactions that are generally fair valued using quantitative models that require the use of multiple market inputs including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets which are not highly active, other observable inputs relevant to the asset or liability, and market inputs corroborated by correlation or other means. These valuation models include inputs such as interest rates, prices, and indices, to generate continuous yield or pricing curves and volatility factors. Where observable inputs are available for substantially the full term of the asset or liability, the instrument is categorized in Level 2. Certain OTC derivatives trade in less active markets with less availability of pricing information and certain structured transactions can require internally developed model inputs that might not be observable in or corroborated by the market. Marketable securities and investments —Comprise foreign government securities, corporate debt securities, deposits, equity securities, and other investments. Bunge analyzes how the prices are derived and determines whether the prices are liquid or less liquid tradable prices. Marketable securities and investments with liquid prices are valued using prices from publicly available sources and classified as Level 1. Marketable securities and investments with less liquid prices are valued using third-party quotes or pricing models and classified as Level 2 or Level 3 as described below. Level 3 Measurements The following relates to assets and liabilities measured at fair value on a recurring basis using Level 3 measurements. An instrument may transfer into or out of Level 3 due to inputs becoming either observable or unobservable. Level 3 Measurements —Transfers in and/or out of Level 3 represent existing assets or liabilities that were either previously categorized as a higher level for which the inputs to the model became unobservable or assets and liabilities that were previously classified as Level 3 for which the lowest significant input became observable during the period. Bunge's policy regarding the timing of transfers between levels is to record the transfers at the end of the reporting period. Level 3 Readily marketable inventories and Trade accounts payable —The significant unobservable inputs resulting in Level 3 classification for RMI, physically settled forward purchase and sales contracts, and Trade accounts payable, relate to certain management estimations regarding costs of transportation and other local market or location-related adjustments, primarily freight related adjustments in the interior of Brazil and the lack of market corroborated information in Canada. In both situations, the Company uses proprietary information such as purchase and sales contracts and contracted prices to value freight, premiums and discounts in its contracts. Movements in the prices of these unobservable inputs alone would not be expected to have a material effect on the Company's financial statements as these contracts do not typically exceed one future crop cycle. Level 3 Derivatives —Level 3 derivative instruments utilize both market observable and unobservable inputs within the fair value measurements. These inputs include commodity prices, price volatility, interest rates, volumes, and locations. Level 3 Others —Primarily relates to marketable securities and investments valued using third-party quotes or pricing models with inputs based on similar securities adjusted to reflect management’s best estimate of the specific characteristics of the securities held by the Company. Such inputs represent a significant component of the fair value of the securities held by the Company, resulting in the securities being classified as Level 3. The tables below present reconciliations for assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three and nine months ended September 30, 2024, and 2023. These instruments were valued using pricing models that management believes reflect the assumptions that would be used by a marketplace participant. Three Months Ended September 30, 2024 (US$ in millions) Readily Marketable Inventories (2) Derivatives, Trade Total Balance, July 1, 2024 $ 1,262 $ 13 $ (377) $ 898 Total gains and losses (realized/unrealized) included in Cost of goods sold (1) 153 (8) 2 147 Purchases 215 — (10) 205 Sales (610) — — (610) Settlements — — 191 191 Transfers into Level 3 396 16 (68) 344 Transfers out of Level 3 (311) (4) 95 (220) Translation adjustment 23 — (8) 15 Balance, September 30, 2024 $ 1,128 $ 17 $ (175) $ 970 (1) Readily marketable inventories, derivatives, net, and Trade accounts payable (2) Effective January 1, 2024, the Company changed its reporting of purchases and sales activity within the readily marketable inventories Level 3 reconciliation to align with the Company's value chain trade flows and intended use, which had no net impact on Level 3 readily marketable inventories period end balances. Prior period activity has been reclassified to conform to current presentation. Three Months Ended September 30, 2023 (US$ in millions) Readily Marketable Inventories (2) Derivatives, Trade Other (3) Total Balance, July 1, 2023 $ 1,384 $ 9 $ (437) $ 11 $ 967 Total gains and losses (realized/unrealized) included in Cost of goods sold (1) 300 39 3 — 342 Total gains and losses (realized/unrealized) included in Other income (expense) - net — — — 1 1 Purchases 554 — (21) — 533 Sales (699) — — — (699) Settlements — — 158 — 158 Transfers into Level 3 450 22 (32) — 440 Transfers out of Level 3 (854) (31) 2 — (883) Translation adjustment (41) — 16 — (25) Balance, September 30, 2023 $ 1,094 $ 39 $ (311) $ 12 $ 834 (1) Readily marketable inventories, derivatives, net, and Trade accounts payable, includes gains/(losses) of $207 million, $24 million and $3 million, respectively, that are attributable to the change in unrealized gains/(losses) relating to Level 3 assets and liabilities still held at September 30, 2023. (2) Effective January 1, 2024, the Company changed its reporting of purchases and sales activity within the readily marketable inventories Level 3 reconciliation to align with the Company's value chain trade flows and intended use, which had no net impact on Level 3 readily marketable inventories period end balances. Prior period activity has been reclassified to conform to current presentation. (3) Comprises the fair values of marketable securities and investments in Other current assets. Included within Other income (expense) - net of the condensed consolidated statements of income are $1 million mark-to-market losses related to securities still held at September 30, 2023. Nine Months Ended September 30, 2024 (US$ in millions) Readily Marketable Inventories (2) Derivatives, Trade Total Balance, January 1, 2024 $ 662 $ 71 $ (232) $ 501 Total gains and losses (realized/unrealized) included in Cost of goods sold (1) 580 (68) 14 526 Purchases 1,594 — (438) 1,156 Sales (1,760) — — (1,760) Settlements — — 499 499 Transfers into Level 3 1,108 20 (233) 895 Transfers out of Level 3 (986) (6) 155 (837) Translation adjustment (70) — 60 (10) Balance, September 30, 2024 $ 1,128 $ 17 $ (175) $ 970 (1) Readily marketable inventories, derivatives, net, and Trade accounts payable, include gains/(losses) of $488 million, $(50) million and $14 million, respectively, that are attributable to the change in unrealized gains/(losses) relating to Level 3 assets and liabilities still held at September 30, 2024. (2) Effective January 1, 2024, the Company changed its reporting of purchases and sales activity within the readily marketable inventories Level 3 reconciliation to align with the Company's value chain trade flows and intended use, which had no net impact on Level 3 readily marketable inventories period end balances. Prior period activity has been reclassified to conform to current presentation. Nine Months Ended September 30, 2023 (US$ in millions) Readily Marketable Inventories (2) Derivatives, Trade Other (3) Total Balance, January 1, 2023 $ 412 $ 51 $ (130) $ 27 $ 360 Total gains and losses (realized/unrealized) included in Cost of goods sold (1) 665 (32) 21 — 654 Total gains and losses (realized/unrealized) included in Other income (expense) - net — — — (1) (1) Purchases 2,767 — (450) — 2,317 Sales (2,215) — — (14) (2,229) Settlements — — 329 — 329 Transfers into Level 3 1,658 51 (113) — 1,596 Transfers out of Level 3 (2,216) (31) 44 — (2,203) Translation adjustment 23 — (12) — 11 Balance, September 30, 2023 $ 1,094 $ 39 $ (311) $ 12 $ 834 (1) Readily marketable inventories, derivatives, net, and Trade accounts payable, includes gains/(losses) of $648 million, $(20) million and $22 million, respectively, that are attributable to the change in unrealized gains/(losses) relating to Level 3 assets and liabilities still held at September 30, 2023. (2) Effective January 1, 2024, the Company changed its reporting of purchases and sales activity within the readily marketable inventories Level 3 reconciliation to align with the Company's value chain trade flows and intended use, which had no net impact on Level 3 readily marketable inventories period end balances. Prior period activity has been reclassified to conform to current presentation. (3) Comprises the fair values of marketable securities and investments in Other current assets. Included within Other income (expense) - net of the condensed consolidated statements of income are $15 million in mark-to-market losses related to securities still held at September 30, 2023. |